RPP DEVELOPMENTS
RPP DEVELOPMENTS
40 Years Strong
PRODUCTION: Karl Pietersen
As one of the country’s oldest and most respected property development companies, RPP Developments, in the year of its 40th anniversary, is proud to sit atop the industry and look back over the past four decades at a job well done. With a highly skilled and experienced workforce, and a strong project pipeline, RPP is a business that is also looking forward to the next 40 years‌
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THE 15 METRE HIGH, 12,000 M² STATE OF THE ART COLD STORAGE FACILITY FOR SEQUENCE LOGISTICS IN AEROTON BUSINESS PARK
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INDUSTRY FOCUS: CONSTRUCTION
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‘40 Years Strong’ is the message coming from RPP Developments – one of South Africa’s leading commercial property developers. Established in 1977 in Johannesburg, RPP Developments has been on a long and diverse journey. This journey has seen the business move into all areas of the property market, becoming an expert in development, investment and management of retail, commercial, industrial and residential properties for institutional and private investors. The company has endured through economic, political and societal change and today holds a reputation as an industry leader thanks to its years of delivering quality service. At the end of the year, RPP will officially mark its 40th anniversary milestone by hosting events that will celebrate its past and also provide its stakeholders with a view as to what the future holds. “We want to send out the message of 40 years strong,” explains Marketing Director, Jock Seeliger (Jnr). “We can safely call ourselves an industry leader in our niche. If we’re not the oldest, we must be one of the oldest commercial property development companies in South Africa. We’ve seen a lot of others come and go. It’s not an easy sector, there’s a lot of risk, and it’s easy to get ahead of yourself, grow too quickly and have overheads catch up to you in the harder times,” he adds. 0-40: FROM NOTHING TO SOMETHING RPP began its life as a small concern, started by two individuals, focussed solely on retail developments. It was founded by Bill Fenner and Mike Crawford - Fenner from a retail industry background and Crawford an entrepreneurial developer. They came together and began working on the traditional strip-mall model and this spawned the name, Retail Property
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Projects which later became RPP Developments. They were pioneers with the regional mall concept which moved away from a strip-mall model to a dominant centre in an area of logistical confluence where you could situate all retailers under one 25,000 m2-plus roof. Two prominent examples include the Centurion Mall (Verwoerdburg as it was then known) and the Northgate Shopping Centre. The 1980’s also saw further expansion into other sectors, including commercial, industrial, hotel, institutional and residential developments. They also diversified into township development whereby they bought large tracts of land, obtained development rights and then established large secure estates such as the Linbro Business Park. The company pioneered the decentralised, landscaped office park model and built up various nodes such as the well-known Sloane Precinct in Bryanston. RPP then started smaller sister companies that focussed on different areas of the property development market, including Bridgeport Properties and Stratford Property Ventures. Current Managing Director, Jock Seeliger Snr and current Development Director, Alan Walker, ran Bridgeport which later merged back into RPP and was converted to Bridgeport Property Administration, the company that handles the property and asset management function of the group. Joe Reed, current Operations Director, formed part of the Stratford Property Ventures management team and rejoined RPP in 2015. Jock Seeliger Jnr, had his property start in a related company namely Bluegate Properties that focused on residential development and marketing and joined RPP in 2008 to take over the marketing function. The financial director, David
Emmett, joined RPP in 2016 as part of a strategy which involved a renewed focus on the asset management function of the group. With the incorporation of Bluegate Properties into the group, RPP has been able to penetrate the lucrative South African affordable residential market. “We’ve completed more than 1000 units for various residential funds. Our residential model is similar to the rest of our business, the only residential element is the product - the structure is a commercial property development structure where we develop a turnkey solution for a pre-negotiated exit. We’ve been busy with residential development through Bluegate since 2004 and we’ve developed a nice yield producing product which seems to have caught the eye of the residential funds that are all looking to expand aggressively at the moment. It is an exciting space to be in and we are expecting a lot of business from it in the future – if you can develop affordable high density residential units close to public transport routes or job opportunities, it’s a market you can’t saturate in South Africa and it should give us some nice volumes.” REACHING ACROSS SOUTHERN AFRICA Currently headquartered in Bryanston, with offices in Cape Town, RPP’s historical focus has been in and around Gauteng. But over the years, its reputation has taken it national, all over South Africa and further afield on to the continent. “Our focus has been on Gauteng, especially Johannesburg and Pretoria, because we are located here, but we have also developed extensively in Cape Town, Bloemfontein, Durban, Pietermaritzburg, Nelspruit, Polokwane, Maseru, Maputo, and Namibia. We also had a small development company in the
RPP DEVELOPMENTS
UK and developed one building which was unfortunately part of a bombing attack by the IRA. We are currently looking at two opportunities in the UK and we are confident that those will be closed and get off the ground soon,” details Seeliger. The company’s spread is down to its expertise. Not a business to overstate its ability or risk its financial position, RPP has not pushed itself into new geographies, rather it has been pulled in by clients with new demands. “RPP has carved out a niche – our strategy over the years has been to not focus on a specific sector, but rather to take advantage of playing in the different sectors when those markets produce opportunities,” explains Seeliger. “We try not to compete with the big commercial Reits, although we are capable of developing large properties for them. We like to focus on a horizontal band, across all sectors that falls just under the radar of the really big players. We are a small-tomedium sized developer that can handle any size development in any sector. We can develop properties for clients, tenants and investors that are structured from 100% rental solutions to 100% ownership, or anything in-between. We can do this in any part of Southern Africa and that is why we have become dominant.” Currently, RPP has a busy pipeline and the company is expecting very little downtime for the rest of the year. “In these tough times, people go back to companies with a track record and longevity – that is a big reason why we have a lot of people coming our way in harder times,” suggests Seeliger. The company recently completed a 19,000 m2 distribution centre for Studio88; it is working on the much-discussed 30,000 m2 ‘Baia Mall’ in Maputo set to open
at the end of the year; it is busy with the Main Straight, a 11,000 m2 office project in Bryanston; whilst the 5000 m2 Fintech campus in Lynnwood, Tshwane is heading towards completion; it is wellunderway with the 4,000 m2 Letsie office project; and it is also busy promoting the Aeroton Business Park. Another exciting project is the ’43 Plain Street’ for First Rand and FNB in Stellenbosch. Next month, RPP will begin work on a 372-unit residential project in Midrand. “We’re excited about all of our projects; in our game, just being able to get your shoes dirty is hugely satisfying,” admits Seeliger. “We’re very excited about a 12,000 m2 cold storage facility that we’re busy with in Aeroton for Sequence Logistics which will add another feather to our cap and we’re excited
about the potential knock on effects in the specialized field of cold storage logistics. Creating a long-term opportunity and a chance for repeat business excites us.” DEVELOPING A NEW STRUCTURE In order to create new efficiencies and order within the business, RPP is currently restructuring with the future in mind. Management is looking to create a distinction between RPP’s development activities and its investment portfolio. “We are restructuring and merging our various holdings into a leverageable, consolidated and diversified fund. In the past, our investments have been made up of ring fenced properties with different shareholders and so
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INDUSTRY FOCUS: CONSTRUCTION
FROM LEFT TO RIGHT JOE REED, DAVID EMMETT, JOCK SEELIGER SNR, JOCK SEELIGER JNR AND BILL FENNER
we’re trying to put it all together into a position that will create the opportunity to source better priced funding and create a structure that will make the efficient management of the assets easier which should result in improved returns for our shareholders,” he says. “We’ve been able to acquire some nice external equity. Following our restructuring, the interaction between our investment business and our development company will put us in a position to take advantage of a greater number of deals and we’re excited about that.” And the ability to make the most of all opportunities will be vital in the future considering the state of the local economy which seems to have become predictably unpredictable. Officially, the country entered technical recession in June and this has created clouds of uncertainty and low confidence around investors. But Seeliger, a self-confessed pessimist,
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remains positive. “What has become clear is that the systems seem to hold up, even when people are trying to get around it. We have always been of the opinion that volatility creates opportunity,” he says. “It always creates some kind of shortage of supply and there’s always demand. We just have to ensure we are careful, choosing the right properties and working within the right lifecycle of those properties.” Since RPP’s establishment, the company has faced many recessionary periods and has come through all of them. This experience has taught RPP’s management to remain focussed on core business activities and look beyond shortterm problems. “Since the downgrades and recessions, people see that the world doesn’t stop spinning even though the hype is massive,” says Seeliger. “As long as you don’t put yourself under short-term cashflow
pressure, you should be able to ride out the difficult times. Tenants still need space and we always provide first-class service. Risks come from everywhere, it’s not just South Africa; take technological disruption for example. The property sector is hugely vulnerable to technological advances and that is why we spend a lot of time thinking about what an office, retail or industrial space will look like in five to ten years’ time.” DEVELOPING PEOPLE Starting out as a two-man operation in the 70s, RPP has built up its staff count over the years, all the while sticking to its principles of remaining a small/medium sized business. The company runs an intricate inhouse training programme aimed at integrating newcomers not only in terms of skill but also in terms of culture. Today, RPP employs around 40 people and a philosophy of ‘conducting business with integrity’ is instilled in everyone.
RPP DEVELOPMENTS
“We don’t get someone who walks in and knows everything. We don’t believe the courses out there are great in terms of practical experience so we have to train our staff. There are so many bright, keen, talented youngsters out there and the key is to find them early and develop them to become very good individuals,” explains Seeliger. “Our model has been to take on people that show potential and then train them inhouse so that they understand our systems, procedures and culture. Retention is more difficult than recruitment. From time to time, people will move from us to the larger commercial developers and Reits but we are happy when individuals show personal growth and find themselves moving into more senior positions externally if we can’t accommodate their development further.” STILL A JOB TO DO Property development is an extremely challenging industry, especially in the current economic environment,
with financial pressures coming from all angles. Regulations and costs can scupper many exciting projects, but since 1977 RPP has managed to find innovative solutions to a multitude of obstacles that have presented themselves in the development environment, Seeliger says that with the restructuring of the company and the large number of opportunities in its pipeline RPP is positioned well for the future and there is still much to be done for the company and the country. “Even though it has been a good 40 years, we feel we are at the start of an exciting new chapter that will take us from strength to strength,” he says “We’re very enthusiastic about the future. We feel the pressures that come with the economic situation the same as everyone else but to date, we’ve been able to find solutions to those problems before they become too material in our lives.” This company doesn’t rest on its laurels or success of the past; it is keen to ensure future success by
developing plans now rather than later. And with the combination of the experience of the founders together with the energy and drive of the younger partners these plans look set to make the idea of ’40 Years Strong’ a reality. “We still feel relatively young for this industry and even our senior directors show no interest in slowing down yet. We think they’ll be sitting by their desks until the end!” he laughs. “We also have very good young people coming in that we are educating. The structure that we’re putting in place will also incentivise those younger people and I think it will stand us in good stead for the next 40 years,” he concludes.
RPP DEVELOPMENTS (011) 244-8000 jenna@rpp.co.za www.rpp.co.za
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AFRICA
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Issue No.61
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JEGIE PADMANATHAN:
People Are The Power
of Bidvest Prestige ALSO IN THIS ISSUE:
CCI South Africa / Thebe Tourism Group / RPP Developments / ALG Estates
A S F E AT U R E D I N
ENTERPRISE AFRICA
AUGUST 2017